Photo courtesy of Julian Marchese
Seventeen year-old Canadian high school student Julian Marchese bought his first stock when he was only eight years-old.
These days he's passionate about global macro trading and he's garnering attention in the space from more seasoned macro traders.
"The breadth and depth of Julian's market knowledge is that of a seasoned macro trader. The young man is very impressive," one New York-based macro trader commented.
You can tell just by reading his trade journals. They read like a trader with at least twenty years experience wrote them, not a high schooler.
What's even more impressive about Marchese, who runs Marchese Financial, is that he's self-taught.
Neither of his parents work in finance. He does, however, have a mentor who is one of the top ten hedge fund managers alive. Marchese wishes to keep the name of his contact private, though.
We caught up with him over the telephone. We've transcribed our interview below. (Note:It has been lightly edited.)
BI: First off, tell us how you got interested in the markets and how long you've been trading.
JM: I first got started into investing when I was 8 years-old. I was always interested in business. You know, I did like lemonade stands. When I was 8 years-old I came to this point, 'OK, I have this money. What do I do with it?' So I went on Google and I searched for stuff to do with excess money and investing came up. It kind of intrigued me how you could invest your money, build your wealth and dreams while also helping others because through investing of course you're giving another entity capital and they can do whatever they so please to do with it and they could build their capital. Investing is what intrigued me and I kind of ran with it for the next couple of years with my life until I realized you know what I don't want to be buying stock and holding for five years waiting that long. I wanted to make money right now. That's when I got into day trading...
BI: I've read some of your trade journals. I see that you run quant studies on the market and that you do a lot of relative strength work. I also see that you talk about the ECB meetings and the impact on currency. This is really sophisticated stuff and it reads as if you've been trading for twenty years. You've learned all this by 17, I'm just curious how? Are you self-taught? Or has someone helped you?
JM: I'm basically self-taught. A lot of people think there was someone either really close to me like either family or friend that kind of guided me. There really wasn't. I recognized an interest in this type of stuff. With the Internet nowadays, there's so much information that you can find. I just asked questions into Google and all the answers I could find were there. It also had a lot of do with experience. I mean when I wanted to test something out, I would just watch the market and I would test my idea and just write notes about it. Over time, doing that constantly over and over again it just became habit.
BI: Do you have a mentor?
JM: I kind of do. I've been able to connect with one of the top-ten hedge fund managers alive today. I mean I can't issue any names. I just made a personal promise.
BI: So we would recognize the person, obviously?
BI: Any hints? What kind of strategy they have?
JM: It's a macro.
BI: How about your family? What sort of influence has your family had on you? And how important is their support?
JM: I definitely wouldn't be here today without their support. Trading, especially when you're a teenager, there's a lot of ups and downs, a lot of learning curves. Obviously in my early years, when I was trying to find out all this new information, when I was trying to find that Holy Grail, it took a lot of searching and my parents they allowed me to do that. They allowed me to find my way I guess. Their emotional support and their overall support for doing what I love to do has enabled me to connect with all these people to learn everything I've been able to learn and hopefully make a bigger impact with regards to financial transparency and education.
BI: This also seems to play into trader psychology. How important is it to have your mentor and a team around you to help you trade?
JM: It's extremely important. I believe you can only get to a certain point on your own. You do need to have people around you that can give you another perspective. Especially when you're trading and you're focused in and you're finding your entry points and you're looking for your new trading opportunity you can miss a lot of things. The amount of information just to make one of three decisions—buy, sell, hold—the amount of information out there is out there is spectacular, so you need to have other people to bounce your ideas off of to check out what they're doing and what their views of the market are.
BI: What do you think is the biggest myth young people have about the markets?
JM: I would say the biggest myth is people think it's a casino, it's gambling. At least, that's what I get from the kids at school where I go to high school. Most of them respect what I do, but at the same time it's like I guess the media has warped the view of Wall Street. Of course, there's a lot of negativity in the press with regards to insider trading scandals and all that and that kind of warps the view of everyone else. I would say the biggest myth is that it's a casino, that it's gambling. In my view, of course, it's educated gambling. Obviously, you can't be right on every trade, but you can put the odds in your favor.
BI: In your experience, has there been a major lesson that you've learned? Have you had a day where you're like 'Oh my gosh, I made a huge screw up trading'?
JM: I would say early in my career, the biggest lesson I've ever learned (it wasn't just a one day thing it was over a couple weeks) is just never get attached to a trade. That's the biggest thing. Getting attached to a position over night, it's very psychological. It can make you do a lot of other traps that traders go into, which is adding to a loser, letting your losses run, maybe cutting your winners too short. Now, a trade always for me is my biggest problem is that early on I'd find a great trade idea and it looks perfect. Of course, it's never 100%. But I would basically trade it like it was a sure thing. The problem with that is that when it starts going against you...it looks even more attractive. The price is going down so you can buy lower. So I think the biggest lesson is exactly that. Just never get attached to a position. There's always another opportunity to get in it. Just cut your losses when it hits your stop outpoint and if you need to buy it when it's a little bit higher than it is. It's still another opportunity. The market is just confirming you in that scenario.
BI: Let's talk about your routine. How do you manage trading and going to school? You said you're a global macro trader. Talk to me about that. What do you trade? What markets do you trade and how are you finding time to do this?
JM: It can definitely seem difficult sometimes. Now in grade twelve I have a spare so I do have a little more time to look at the markets even when I'm at school. I have an iPad and I clear through Interactive Brokers so they have their own app on the iPad. So as long as I have an Internet connection, I can basically trade wherever I can. It's always a lot easier to absorb information when you're sitting in front of your desk. Once again, with Twitter, for example, I can check out what's happening because everyone is Tweeting about it. If something's happening in the markets and I have no clue what's happening because I'm just sitting in English class I can just quickly check Twitter and 'Oh, OK. That's what's happening.'
BI: What traders did you look up to as a kid growing up?
JM: The big guys that I up to were everyone in Market Wizard series. I really loved George Soros' The Alchemy Of Finance, great book, where he goes through his trade thesis. I love Paul Tudor Jones for his risk management views. And Bruce Kovner for his way to bring together everything. Stanley Druckenmiller, I love the way he can bring together such a technical view and a fundamental view and piece it together and really bang out some good returns back then.
BI: You mentioned some great books. What are you three favorite trading books. The ones that have been the most influential to you?
JM: No. 1 would be Market Wizards, No. 2. Reminisces of a Stock Operator. And No. 3. would be The Daily Trading Coach by Brett Steenbarger. His insights on the psychology of trading are just phenomenal.
BI: Alright, you're a high school student. What do you like to do for fun when you're not trading?
JM: I love hanging out with friends. I love playing tennis...Some video games. I guess I'll play occasionally. I'm not really an avid gamer. The market is my video game. Golf, I love to play in the summer.
BI: I read somewhere that you play the guitar.
JM: Yeah, I'm also self-taught on the guitar. I used to play piano. My mom put me into piano lessons at a pretty early age. I liked it, but it gave me a foundation. But I always liked classic rock music. I always wanted to play guitar. I just picked it up and went with it. It's a great stress reliever. I always have it right beside me on my trading desk. Whenever it's getting pretty active and I don't want to look at the screen I just pick it up and play away.
BI: Any favorite artists?
JM: I love classic rock so Led Zeppelin, Pink Floyd, lots of progressive rock. Also, I like a broad range. I like some electronic and some hip-hop as well. I guess my foundation would be in classic rock.
BI: What do you want to study in college?
JM: Finance and economics. Once again, it's my passion. As long as I'm looking at anything regarding markets, whether it's trading or research. I'm looking to do an economics and or finance degree.
BI: You said this is your passion. What do you want to do for you career? What's your ultimate goal?
JM: My ultimate goal is to be a hedge fund manager. Obviously, I need to do something with regards to the markets. That's my passion. Trading is the best way to be connected with the market...One of the key things with being a fund manager is it's a very lucrative business. There's definitely a lot of wealth to be made. With wealth, it gives you the power to help people and to impact the world. Since I've been looking at the markets and in the trading industry for so long now, I've realized how important transparency and financial literacy is. Hopefully, my ultimate goal is to make enough wealth and make an impact in that field. Just bringing financial literacy as a staple to the masses.
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